Americaīs Love Hate Relationship with Credit Cards
Aubrey Clark
October 15, 2008
Itīs been said, that real hatred is only possible when it is derived from something you love; and America loves credit cards. The problem is, credit cards are simply a one night stand that fulfilled our lustful desire during a moment of weakness, and now we're stuck with them. To quote the movie Wedding Crashers, theyīre a "Stage Five Clinger". Now we are faced with the unavoidable task of kicking them out of our lives, unless we go back for seconds, which cements the relationship.
The hardest thing about being a writer is the daily task of developing interesting ideas to write about. If you factor in the fact that Iīm a financial writer, which usually generates a yawn while reading the title, itīs really hard. Before I begin to write, I get most of my ideas by scanning the financial headlines on Google to see what topics are hot and which are not. While looking for ideas today, one article in particular stood out to me; and this seems to be the consensus among writers on the subject:
"Are you unhappy with the credit card that the bank pushed down your throat recently"?
Okay, thatīs a snappy headline, but how many of us actually cough up a credit card when clearing our throat? I may be wrong, but I believe that most American consumers are pretty smart. Furthermore, I believe that most consumers enter into a credit card agreement knowing that they are making a deal with the devil. We all know about the "fine print", which we usually glaze over in hopes of getting approved for that new card. So why do we do it? In one word, LUST.
Granted, some of Americans are relying on credit cards now to help get the through the financial crisis of higher food and energy prices. However, most consumers have had to resort to credit cards as a result of the car or house payment thatīs too high which was chosen out of lust for things they could not afford in the first place. Letīs face it, we are a credit-addicted society, thus our love-hate relationship. We know the drug is bad, and the drug dealer is a thug; we're addicted, not stupid. So the question is: Do we arrest the drug dealer or cure the habit?
This question has been floating around ever since Nancy Reaganīs war on drugs was launched in the '80s. Do we cure the addict and dry them out, or do we squeeze the dealer (credit card issuers) and dry up the supply? Each strategy will bring huge consequences on our economy. If we make the credit addicts go "cold turkey" by drying up the supply we will see repossessions and foreclosures skyrocket, driving an already ailing economy even deeper into recession. If we cripple the credit card companies with over the top regulations, we run the risk of further slowing the flow of money, which will do the same thing.
So, how can this cycle be broken without further harming the economy? In my humble opinion, we shouldnīt do anything right now pertaining to credit cards. Banks are already reeling from their losses from the mortgage side of their business. Slapping restrictions on the other side (credit cards) will cause a lot of bank closings and effectively dry up credit sources for consumers.
Consumers need to be weaned off of their addiction, and mortgages are a good start. Mortgages are no longer easy to qualify for, which effectively cuts off this avenue to the credit-addicted consumer. After the market recovers from the mortgage fiasco, we can begin to tighten the noose on the credit card companies. In the meantime, you can bet the credit card issuers are going to do some belt tightening without having to be told to do so. If you ask me, that's a good thing.
Aubrey Clark is a Syndicated writer, author and editor for Direct Banc, a low interest rate credit card directory.His current project outlines how to choose the best Airline Miles Credit Card and how to maximize the benefits when using it.
The hardest thing about being a writer is the daily task of developing interesting ideas to write about. If you factor in the fact that Iīm a financial writer, which usually generates a yawn while reading the title, itīs really hard. Before I begin to write, I get most of my ideas by scanning the financial headlines on Google to see what topics are hot and which are not. While looking for ideas today, one article in particular stood out to me; and this seems to be the consensus among writers on the subject:
"Are you unhappy with the credit card that the bank pushed down your throat recently"?
Okay, thatīs a snappy headline, but how many of us actually cough up a credit card when clearing our throat? I may be wrong, but I believe that most American consumers are pretty smart. Furthermore, I believe that most consumers enter into a credit card agreement knowing that they are making a deal with the devil. We all know about the "fine print", which we usually glaze over in hopes of getting approved for that new card. So why do we do it? In one word, LUST.
Granted, some of Americans are relying on credit cards now to help get the through the financial crisis of higher food and energy prices. However, most consumers have had to resort to credit cards as a result of the car or house payment thatīs too high which was chosen out of lust for things they could not afford in the first place. Letīs face it, we are a credit-addicted society, thus our love-hate relationship. We know the drug is bad, and the drug dealer is a thug; we're addicted, not stupid. So the question is: Do we arrest the drug dealer or cure the habit?
This question has been floating around ever since Nancy Reaganīs war on drugs was launched in the '80s. Do we cure the addict and dry them out, or do we squeeze the dealer (credit card issuers) and dry up the supply? Each strategy will bring huge consequences on our economy. If we make the credit addicts go "cold turkey" by drying up the supply we will see repossessions and foreclosures skyrocket, driving an already ailing economy even deeper into recession. If we cripple the credit card companies with over the top regulations, we run the risk of further slowing the flow of money, which will do the same thing.
So, how can this cycle be broken without further harming the economy? In my humble opinion, we shouldnīt do anything right now pertaining to credit cards. Banks are already reeling from their losses from the mortgage side of their business. Slapping restrictions on the other side (credit cards) will cause a lot of bank closings and effectively dry up credit sources for consumers.
Consumers need to be weaned off of their addiction, and mortgages are a good start. Mortgages are no longer easy to qualify for, which effectively cuts off this avenue to the credit-addicted consumer. After the market recovers from the mortgage fiasco, we can begin to tighten the noose on the credit card companies. In the meantime, you can bet the credit card issuers are going to do some belt tightening without having to be told to do so. If you ask me, that's a good thing.
Aubrey Clark is a Syndicated writer, author and editor for Direct Banc, a low interest rate credit card directory.His current project outlines how to choose the best Airline Miles Credit Card and how to maximize the benefits when using it.
Print
Email
